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Articles on VBK

  • Using Asset Classes in Amerivest Guided Portfolios to Construct ETF Portfolios

    07/22/2011

    We have just released ETF based plan Amerivest Guided Portfolios Based ETF Plan that uses index ETFs to represent the asset classes suggested by the Amerivest balanced portfolio. Based on Amerivest, the model portfolios are suggested by Morningstars.

    One can see the list of ETFs used in this plan from the Investment Options of the plan.

    This plan investment choice is rated as average based on our plan rating methodology that measures the effectiveness of a plan's available investment funds. It has the following detailed ratings:

    Diversification -- Rated as great (94%)
    Fund Quality -- Rated as below average (26%)
    Portfolio Building -- Rated as below average (23%)
    Overall Rating -- Average (45%)

    The performance has been reasonable.

    Portfolio Performance Comparison

    Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
    VFINX 23% 151% 3% 15% 3% 8%
    Amerivest Guided Portfolios Based ETF Plan Strategic Asset Allocation Moderate 19% 181% 3% 17% 6% 34%
    Amerivest Guided Portfolios Based ETF Plan Tactical Asset Allocation Moderate 14% 125% 7% 44% 11% 76%
    VBINX 16% 203% 6% 32% 5% 28%

    Both SAA and TAA portfolios beat the general S&P 500 (SPX) (VFINX) and the balanced portfolio index (VBINX) in the last 5 years.

    See more detailed comparison from our comparison tool here. Users can change the parameters on that page to compare with other portfolios or funds.

    See the SeekingAlpha article for some detailed description on this plan.

    In general, this is a good plan that has very good diversification. Users can do more comparison and studies on this.

    Symbols: BIV, SPX, BLV, BND, BSV, BWX, DBC, EMB, GWX, IWC, JNK, MBB, TIP, VBK, VBR, VEU, VNQ, VOE, VOT, VTI, VTV, VUG, VWO, Brokerage Plans

     

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  • US Small Cap Growth ETFs Continue Strong Gains

    05/05/2011

     

    Small cap ETFs are generally made up of investments in companies with less than $1 billion in market capitalization. Small Cap Growth ETFs offer investors diversification throughout a wide range of industries and the potential for very high returns. At the same time, these ETFs tend to move up and down with the market and are subject to high levels of volatility.

    US Small Cap Growth ETFs, represented by the iShares Russell 2000 Small Cap Growth Index ETF (IWO), continued to outperform other styles of US Equity Assets with a one week return of 2.66% and a trend score of 13.93%. The small cap growth sector has also outperformed other US Equity Assets over a 52 week period, returning 24.31% in the past year. (See Russell Table)

    US Equity Style Return

    4/29/2011

     

    Assets Class Symbols 04/27
    Trend
    Score
    04/20
    Trend
    Score
    Direction
    Russell Smallcap Growth IWO 14.01% 13.06% ^
    Russell Midcap Growth IWP 12.57% 11.91% ^
    Russell Smallcap Index IWM 11.05% 9.92% ^
    Russell Midcap Indedx IWR 10.9% 10.15% ^
    Russell Midcap Value IWS 9.84% 9.03% ^
    Russell Largecap Growth IWF 9.25% 8.24% ^
    Russell Smallcap Value IWN 8.56% 7.26% ^
    Russell Largecap Index IWB 8.52% 7.38% ^
    Russell Largecap Value IWD 8.15% 6.96% ^

    The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).

     

    U.S. Small Cap Growth

    04/29/2011
    Description Symbol 1 Yr 3 Yr 5 Yr Avg. Volume(K) 1 Yr Sharpe
    Vanguard Small Cap Growth ETF VBK 27.33% 10.31% 6.52% 248 121.29%
    iShares Russell 2000 Growth In IWO 26.68% 9.57% 4.89% 1,679 119.24%
    iShares S&P SmallCap 600 Growth IJT 24.47% 8.6% 5.17% 187 121.82%

    Among US Small Cap Growth ETFs, the Vanguard Small Cap Growth ETF (VBK) has shown the most strength, returning 27.33% in the past year. Others, including the iShares Russell 2000 Growth Index ETF (IWO) and the iShares S&P SmallCap 600 Growth ETF (UT) have also provided investors with returns higher than 24%.

    In recent periods, equities have experienced high levels of growth, leading many to speculate that a retraction is inevitable. If equity markets begin to lose value, US Small Cap Growth ETFs will certainly be impacted, as the performance of these ETFs correlate with general market conditions. Still, investors should expect strong returns from ETFs in this sector for the foreseeable future.


    Symbols: VBK, IWO, IJT, IWO, IWM, IWR, IWS, IWF, IWN, IWB, IWD

     

    Tickers: (NYSE: VBK) (NYSE: IWO) (NYSE: IJT) (NYSE: IWO) (NYSE: IWP) (NYSE: IWM) (NYSE: IWR) (NYSE: IWS) (NYSE: IWF) (NYSE: IWN) (NYSE: IWB) (NYSE: IWD)

     

    Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

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  • REIT and Commodities In Simple Six Fund Portfolio Shows Up Aronson's Lazy Portfolio

    04/20/2011

    The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.

    We continue to examine luminary portfolios to see what we can learn and use to further our investment portfolios.

    Ted Aronson and his AJO Partners manage about $25 billion of institutional assets. Aronson puts his family's taxable money in this well-diversified portfolio of no-load index funds.

    Fund Weight Ticker ETF
    US Equities 40% VFINX, VEXMX, VISGX, VTSMX, VISXX VTI, TMW, VBK, VBR
    International Equity 20% VPACX, VEURX VEA
    Emerging Markets 10% VEIEX EEM
    US Bonds 30% VIPSX, VUSTX, VWEHX TIP, LQD, HYG

    This is a well diversified four asset class portfolio with an aggressive profile. The US equities are broadly diversified. Asia Pacific is put above Europe for developed markets. There is a diversified set of fixed income with VWEHX and VUSTX being relatively high risk. The long term treasury bond has proved to be a good diversifier in recent history -- today all bonds are under pressure so this may be less true.

    The US component is possibly over-weighted and emerging markets could be increased or, even better, some real estate assets could be added.

    This portfolio was last reviewed at the end of the year and we now re-examine performance over the last three months as we see markets changing and inflation becoming more of a present reality.

    This lazy portfolio will be compared with six asset class SIB to examine the returns of four and six asset class portfolios


    Portfolio Performance Comparison

    Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
    Aronson Original
    6% 74% 2% 14% 3% 16%
    Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate
    10% 71% 9% 73% 13% 91%
    Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate
    13% 103% 3% 20% 7% 35%

    full comparison

    The Aronson portfolio has four asset classes missing out on REIT and commodities. The performance over the last five years has not been exceptional with the Simple SIB able to beat it across the board.

    Over the last three months, REIT and commodities have been in favor and having neither has had an impact on the Aronson returns.

    Takeaways
    • The Aronson lazy portfolio has moderate returns that can be beaten
    • Having broader diversification pays off as market conditions change
    • ETFs can readily be used to implement these portfolios with good performance
    • A 10% spread over five years means that it’s worth looking at alternatives
    Disclosure:

    MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
    The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.

     
    Exchange Tickers:  (NYSE: VFINX), (NYSE: VEXMX), (NYSE: VISGX), (NYSE: VTSMX), (NYSE: VISXX), (NYSE: VTI), (NYSE: TMW), (NYSE: VBK), (NYSE: VBR), (NYSE: VPACX), (NYSE: VEURX), (NYSE: VEA), (NYSE: VEIEX), (NYSE: EEM), (NYSE: VIPSX), (NYSE: VUSTX), (NYSE: VWEHX), (NYSE: TIP), (NYSE: LQD), (NYSE: HYG)

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  • REIT and Commodities In Simple Six Fund Portfolio Shows Up Aronson's Lazy Portfolio

    04/19/2011

    The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.

    We continue to examine luminary portfolios to see what we can learn and use to further our investment portfolios.

    Ted Aronson and his AJO Partners manage about $25 billion of institutional assets. Aronson puts his family's taxable money in this well-diversified portfolio of no-load index funds.

    Fund Weight Ticker ETF
    US Equities 40% VFINX, VEXMX, VISGX, VTSMX, VISXX VTI, TMW, VBK, VBR
    International Equity 20% VPACX, VEURX VEA
    Emerging Markets 10% VEIEX EEM
    US Bonds 30% VIPSX, VUSTX, VWEHX TIP, LQD, HYG

    This is a well diversified four asset class portfolio with an aggressive profile. The US equities are broadly diversified. Asia Pacific is put above Europe for developed markets. There is a diversified set of fixed income with VWEHX and VUSTX being relatively high risk. The long term treasury bond has proved to be a good diversifier in recent history -- today all bonds are under pressure so this may be less true.

    The US component is possibly over-weighted and emerging markets could be increased or, even better, some real estate assets could be added.

    This portfolio was last reviewed at the end of the year and we now re-examine performance over the last three months as we see markets changing and inflation becoming more of a present reality.

    This lazy portfolio will be compared with six asset class SIB to examine the returns of four and six asset class portfolios


    Portfolio Performance Comparison

    Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
    Aronson Original
    6% 74% 2% 14% 3% 16%
    Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate
    10% 71% 9% 73% 13% 91%
    Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate
    13% 103% 3% 20% 7% 35%

    full comparison

    The Aronson portfolio has four asset classes missing out on REIT and commodities. The performance over the last five years has not been exceptional with the Simple SIB able to beat it across the board.

    Over the last three months, REIT and commodities have been in favor and having neither has had an impact on the Aronson returns.

    Takeaways
    • The Aronson lazy portfolio has moderate returns that can be beaten
    • Having broader diversification pays off as market conditions change
    • ETFs can readily be used to implement these portfolios with good performance
    • A 10% spread over five years means that it’s worth looking at alternatives
    Disclosure:

    MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
    The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.

     

    Exchange Tickers:  (NYSE: VFINX), (NYSE: VEXMX), (NYSE: VISGX), (NYSE: VTSMX), (NYSE: VISXX), (NYSE: VTI), (NYSE: TMW), (NYSE: VBK), (NYSE: VBR), (NYSE: VPACX), (NYSE: VEURX), (NYSE: VEA), (NYSE: VEIEX), (NYSE: EEM), (NYSE: VIPSX), (NYSE: VUSTX), (NYSE: VWEHX), (NYSE: TIP), (NYSE: LQD), (NYSE: HYG)

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  • Armstrong's Informed Investor Lazy Portfolio Feels The Commodities Pain

    04/18/2011

    The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.

    We continue to examine luminary portfolios to see what we can learn and use to further our investment portfolios.

    Frank Armstrong, author of The Informed Investor, proposed this portfolio for an MSN Money article. The two key points of the portfolio are that it has four asset classes (US, International, REIT, Bonds) and relies on market indices rather than active management. The portfolio uses index funds because index funds eliminate manager risk. It overweights small-cap stocks as small-cap stocks have historically outperformed large caps stocks. The portfolio has a strong value tilt, based on the theory that, over the long haul, beaten-down stocks will perform better than high-flying growth stocks.

    This should be a low cost, well performing portfolio.

    The fund selection for testing the strategy is listed below with the ETF alternatives:

    • 9.25% in Vanguard Small Cap Value VISVX (SCZ)
    • 9.25% in Vanguard Value VIVAX (SPY, IYY)
    • 6.25% in Vanguard Small-Cap Growth VISGX (VBK)
    • 6.25% in Vanguard 500 Index VFINX (IVW)
    • 31% in Vanguard Total International Stock VGTSX (EFA)
    • 8% in Vanguard REIT VGSIX (IYR, VNQ, RWX)
    • 30% in Vanguard Short-Term Bond VBISX (BND, AGG)

    Things to note about the portfolio:

    • This is designed as a lazy portfolio with limited rebalancing specified
    • 31% in US equities is significant with a mix of large and small cap stocks
    • With 70% in equities, this is a growth portfolio
    • REIT is possibly underweighted
    • There is no commodity asset class


    The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies. For comparison purpose, we also include the moderate model portfolios of a typical 6 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent: US Equity: SPY or VTI
    Commodity: DBC
    Foreign Equity: EFA or VEU
    REITs: IYR or VNQ or ICF
    Emerging Market Equity: EEM or VWO
    Fixed Income: AGG or BND

    Portfolio Performance Comparison

    Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
    Armstrong Original 10% 66% 4% 17% 5% 20%
    Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 10% 71% 9% 73% 13% 91%
    Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 13% 103% 3% 20% 7% 35%

    A detailed comparison can be found here

     

    Takeaways

    • 2010 was a good year for lazy portfolios and as we continue through 2011while equities are still performing well, not having a commodities option hurts returns

    • TAA has benefits in terms of being able to stay away from some area such as European equities

    • Index funds continue to show good results against managed funds

    • Larger asset class plans have the benefit of stability and good returns

    Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.  


    Symbols: VISVX, SCZ, VIVAX, SPY, IYY, VISGX, VBK, VFINX, IVW, VGTSX, EFA, VGSIX, IYR, VNQ, RWX, BND, AGG, DBC, VEU, ICF, EEM, VWO

     

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  • Schwab Mutual Funds Beat out ETFs

    04/06/2011

  • Schwab Select ETF Plan Has Bright Prospects

    04/06/2011

  • National Semiconductor Provides Good Funds in Their Retirement Plan

    04/04/2011

  • MidAmerican Energy Company's 401K Plan: More Diversification Needed

    03/31/2011

  • Online Pioneer Amazon.com Can Expand Its 401K Plan for More Diversification

    03/22/2011

  • RWO, RWR Replace VNQ in the Six Asset Portfolio

    03/20/2011

  • Swensen Six Asset Lazy Portfolio Review Exhibits Different Q1 Behavior

    03/19/2011

  • What Do Japan and Libya Tell Us About Retirement Investing?

    03/17/2011

  • Schwab ETF Select List Plan Offers Diversification and High Quality Fund Selection

    03/16/2011

  • Starbucks Should Expand Its 401K Retirement Plan, Just As What It Did in Their Business

    03/11/2011

  • Does Adding Three US Funds To A Simple Six Asset Portfolio Make a Difference?

    03/10/2011

  • Initiating Tracking of US Subclasses

    02/22/2011

  • Initiating Tracking of US Subclasses

    02/22/2011

  • E-Trade ETF Plan Hits Most of the High Notes

    02/16/2011

  • RSP Leads US Large Cap Blend Equities

    02/14/2011

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